Information Statement on our Policy on the Consideration of Principal Adverse Impacts of Investment Decisions on Sustainability Factors
Sustainable Finance Transparency
The European Union has introduced a series of legal measures (the primary one being the Sustainable Finance Disclosures Regulation (Regulation (EU) 2019/2088), ”SFDR”) requiring firms that manage investment funds to provide transparency on how they integrate sustainability considerations into the investment process with respect to the investment funds they manage.
This Information Statement has been prepared for the purpose of meeting the disclosure requirements in Article 4 of SFDR, that is, specifically, the disclosure requirements applicable to us as a firm with regard to whether and how we consider principal adverse impacts of investment decisions on sustainability factors.
It is noted that the regulatory technical standards (”RTS”) to specify the details of the content, methodologies and presentation of the information to be disclosed under Article 4 of SFDR have been delayed and will not be issued when the relevant disclosure obligations in SFDR become effective.
It is noted that the European Commission has recommended that from the effective date of SFDR, firms are recommended to comply with the specific disclosure obligations in SFDR that are reliant on RTS on the basis of a high-level, principles-based approach.
We therefore seek to comply on a best efforts basis with the relevant disclosure obligations and issue this Information Statement as a means of achieving this objective.
It is expected that this Information Statement will be reviewed and updated once the relevant RTS come into effect, noting in particular, that the RTS are expected to contain details on the content, methodologies and presentation of the information to be disclosed and this could therefore require a revised approach to how we seek to meet the SFDR disclosure obligations.
The Information Statement may also be updated to take account of the Regulation on the Establishment of a Framework to Facilitate Sustainable Investment (Regulation EU/2020/852, the ”Taxonomy Regulation”) once it comes into effect (1 January 2022).
Our Approach to Sustainable Investment
We believe that investors, and asset managers that invest on their behalf, have a responsibility to make their investments in a way that effectively supports a sustainable society.
At the core of our commitment to help our clients achieve their financial objectives is a conviction that this can be achieved by investing responsibly.
Information Regarding the Consideration of Principal Adverse Impacts of Investment Decisions on Sustainability Factors
Disclosure under Article 4(1)(b) of SFDR:
In accordance with Article 4 SFDR, the AIFM is required to publish a statement on whether it considers the principal adverse impacts of investment decisions on sustainability factors, and if so, to disclose specific information as required under SFDR (”PASI” or ”Principal Adverse Sustainability Impact Statement”).
The ICAV and the AIFM have reviewed the requirements of Article 4 SFDR to the extent possible, noting that the RTS which will set out the content, methodology and information required in the PASI remain in draft form and are unlikely to come into effect until 1 January 2022. The ICAV and the AIFM support the policy aims behind Article 4 SFDR, including the improvement of transparency to clients, investors and the markets regarding how financial market participants integrate consideration of the adverse impacts of investment decisions on sustainability factors. Owing to the size, nature and scale of their activities, however, the ICAV and the AIFM consider that it would be disproportionate for the AIFM to comply with the requirements of Article 4 and to publish a PASI.
The AIFM is also concerned about the lack of readily available data to comply with many of the reporting requirements under Article 4, as the AIFM believes that issuers and market data providers are not yet ready to make available all necessary data required for such reporting.
The ICAV and the AIFM will keep their decision not to comply with Article 4 under regular review and will formally re-evaluate the decision at least annually.